New Products

Allianz to Launch European Equity Income Fund

Nick Parmee 23 January 2009

Allianz to Launch European Equity Income Fund

German asset manager Allianz Global Investors is planning to launch an Allianz RCM European Equity Income Fund, with versions available in both the UK and continental Europe. It will invest in European blue chip companies and will aim for a high but sustainable level of income.

Neil Dwane, chief investment officer Europe at Allianz investment and research platform RCM, said: “Valuations for equities are already discounting a great deal of bad news, including dividend cuts.  Given the incredibly challenging outlook for world markets, we believe that equities will yield better returns than cash or government debt as bond issuance and money are printed in huge quantities.  We see many European blue chips as offering extremely attractive and well covered dividend yields.  These are strong companies that we think are unlikely to suffer too much from the downturn.  

“The continent is currently offering three times as many high-yielding stocks and greater dividend cover than the UK.  European companies have a higher free cashflow than the global average and the continent is also less dependent on the banking sector for dividends.”

Nick Smith, head of fund distribution, at Allianz Global Investors (UK), said: “We have been market testing a European Income product and the feedback has been very favourable.  The market is asking for a product which will offer attractive returns despite the difficult environment.  Many investors already have sizeable portfolios in the UK equity income sector. This new fund is designed to diversify these portfolios, and provide investors with the opportunity to benefit from the recovery in equity markets which RCM expects to follow later this year.” 

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes